Production Linked Incentive (PLI) Scheme for Textiles

Production Linked Incentive (PLI) Scheme for Textiles

Part of: GS-Prelims and GS – III – Economy

Context: A total of 61 applicants has been approved. 

• Government approved PLI Scheme for Textiles products for enhancing India’s manufacturing capabilities and enhancing exports with an approved financial outlay of Rs 10,683 crore over a five-year period
• Government reduced import duty of cotton to zero

• Objective: To help India regain its historical dominant status in global textiles trade.

Key features of the scheme

• The incentives shall encourage investment in new capacities in man-made fibre (MMF) apparel, MMF fabrics, and 10 segments or products of technical textiles. 
• The scheme shall help attract investment of more than Rs. 19,000 crore, creating an additional 7.5 lakh direct jobs.
• There will be two levels of investment with different sets of incentives. 
  • In the first category, any person or firm can invest a minimum Rs. 300 crore in plant, machinery, and civil works to produce the identified products to ensure eligibility for the PLI.
  • In the second category a minimum investment of Rs. 100 crore would make an individual or firm eligible to apply for the incentives.
• Priority would be given for investment in aspirational districts, tier-three, tier-four towns and rural areas. 
• The scheme is expected to benefit States such as Gujarat, U.P., Maharashtra, Tamil Nadu, Punjab, Andhra, Telangana and Odisha.
• Applicants would have two years as investment period and 2024-2025 would be the ‘performance’ year. The incentive flow would start in 2025-2026 and extend for five years.

Significance of the Textiles Sector

• Textiles & garments industry is a labour intensive sector that employs 45 million people in India. 
• It is second only to the agriculture sector in terms of employment.
• It contributes 2.3% to Indian GDP, 7% of Industrial Output, 12% to the export earnings of India and employs more than 21% of total employment.
• India is the 6th largest producer of Technical Textiles with 6% Global Share, largest producer of cotton & jute in the world.
• Technical textiles are functional fabrics that have applications in industries such as automobiles, civil engineering and construction, 
• India is also the second largest producer of silk in the world and 95% of the world’s hand woven fabric comes from India.
• Two-thirds of India’s textile exports now are cotton based whereas 66-70% of world trade in textiles and apparel is MMF-based and technical textiles.